A simple health plan

Plain and simple, today's health care costs in the United States are too high. In 2008, they amounted to about $2.2 trillion or 16.2 percent of the gross national product. The average per employee cost for health care was $9,144, up 8 percent from 2007.

It should come as no surprise, however, that we are spending a lot on health care. Health care premiums have increased at rates well above inflation and workers' wages over the past 15 years. The cost to treat heart disease and cancer has escalated. A doctor visit costs $121, an emergency room visit is $586, and the average brand-name prescription costs about $135. In fact, about 44 percent of a company's benefit costs are due to health care.

Companies are not passively accepting these rising health care costs and many have reduced benefit levels as a way to deal with them. Sixty-six percent have increased co-pays, 59 percent have increased participant costs, 56 percent have increased deductibles, 55 percent have increased members' prescription drug costs, and 31 percent have switched providers. We also have seen an increase in the offering of wellness programs as a way to deal with rising health care costs. Presently, 58 percent of organizations offer them.

Worksite wellness is a natural extension of trying to reduce health care costs. Research has shown that companies with comprehensive wellness programs can achieve as much as a 5:1 return on investment.

Wellness Program Benefits There are two ways to look at the economic benefits of worksite wellness. First, there is a body of literature that has demonstrated excessive costs associated with various lifestyle behaviors, such as tobacco use, obesity and living a sedentary lifestyle.

A study conducted at Steelcase Corp. by the University of Michigan determined that for every Steelcase employee who practiced excessive alcohol consumption, the company paid $597 more per year in health care costs. For every employee who was sedentary, the company paid $488 more. For every employee who had hypertension, the company paid $327 more. Smokers cost the company $285 more and overweight employees cost $222 more. Similar studies were conducted at DuPont and Chrysler.

The second way to evaluate the economic benefits of wellness is to look at studies that have demonstrated a financial savings after a wellness program has been implemented. Literally hundreds of studies have documented reductions in absenteeism and health care costs. A review article in the American Journal of Health Promotion showed that, on average, comprehensive worksite wellness programs showed a $3.48 to $1 return on investment due to reduced health care costs and a $5.82 to $1 return on investment due to reduced absenteeism.

Other benefits of wellness programs include:

Improved employee health

Improved employee morale

Increased productivity

Decreased presenteeism

Reduced turnover

Decreased on-the-job accidents

Employees' Health Status Data from the U.S. Department of Health and Human Services shows that on average, of every 100 workers in this country, 27 have cardiovascular disease, 24 have high blood pressure, 50 or more have high cholesterol, 26 are classified as being obese, 22 smoke, 10 are heavy drinkers, 60 don't wear seat belts regularly, 50 don't get adequate exercise and 44 suffer from excessive levels of stress.

Obviously, employee groups differ by demographics. If you have employees with a low education level, a different racial mix, a different age group, more women than men, etc., your employee risks will differ from these percentages. You can use these data, however, as a guide for determining what types of risks employees may have and what programs to offer.

The American Institute for Preventive Medicine provides companies with its Wellness Wizard at no charge to help them determine their employee health risks, costs and savings. The Wellness Wizard uses statistics from the U.S. government to calculate the number of employees nationally who have various risk factors. It then provides a financial cost associated with these risks based upon published research data in peer-reviewed journals.

Finally, it calculates how much money a company can save by their improving employees' health. To receive a Wellness Wizard for your company, email the author with your number of employees.

10 key characteristics of wellness programs

Like the word "love," wellness means different things to different people. Wellness programs that produce the greatest return on investment:

1) Provide assessment activities. A health assessment helps determine how unhealthy or healthy your employees are. This can take the form of a health screening where people get their height, weight, cholesterol, and blood pressure checked to help them learn about their health risks. It also can include a computerized analysis called a health risk appraisal. This consists of a confidential questionnaire that asks employees how often they smoke or drink alcohol, how much they weigh, how tall they are, if they have a family history of heart disease or cancer, etc. All of this information is then compared to other people of the same age, race and sex. These assessment activities provide the company with a baseline of the health of their work force. They also might motivate an employee to make lifestyle changes.

2) Use communication materials. Communication materials are appropriate for all companies, but particularly for those with multiple locations because it is difficult to reach employees working at remote worksites, particularly if they are small in size. These materials can include newsletters, calendars, pocket planners, paycheck stuffers, posters, brochure racks, and table tents. They may also include online information and e-mails. Communicating with workers about wellness must be done on an ongoing, consistent basis to be effective.

3) Offer self-help programs. Self-help interventions for tobacco cessation, weight control, stress management, etc., have become more popular as the field of health promotion has become more sophisticated in helping people help themselves. An advantage of self-help programs is employees can change their behavior on their own time and in the privacy of their own homes. Examples of self-help materials include interactive videos, DVDs, computer programs, audiotapes and booklets.

4) Provide health coaching. Many employees would like to change their lifestyle behaviors, but need professional assistance in doing so. This is where health coaching plays an important role. Each employee is assigned a health coach who guides them through the behavior-change process, whether it be to quit smoking, lose weight, manage stress, exercise more, or manage one's time more effectively.

5) Teach medical self-care. Medical self-care represents one of the most promising ways to reduce health care costs. It consists of teaching employees to become wiser consumers of the health care system. They learn when to seek professional assistance for health conditions that warrant it and when to use self-care for those symptoms that can be treated at home. This is important because 55 percent of all ER visits and 25 percent of all doctor visits are unnecessary. The five elements of an effective self-care program are:

Self-care book

Self-care instructional workshop

Nurse advice line

Self-care software

Promotional materials

6) Address high-risk employees. Employees who have chronic conditions, such as diabetes and asthma, are considered to be high-risk employees. They tend to have health care costs that are anywhere from 100 to 500 times greater than the costs for healthy employees. Providing a disease management program can moderate these costs.

7) Address low-risk employees. Research conducted at the University of Michigan Health Management Research Center has shown that healthy employees will not stay that way unless wellness programming is provided for them. In fact, up to 20 percent of low-risk employees will move to a higher risk category within one year. Research at the center also has shown that when an employee loses low-risk status, there is an additional cost of $350 per year. When employees regain low-risk status, there is a decrease in costs of $150 per year.

8) Offer incentives. The use of incentives to encourage people to participate in wellness activities and change their lifestyles has become very popular. Incentives may take the form of paying less for health plan contributions, offering lower coverage levels, providing reimbursement for wellness programs, giving insurance premium discounts, and providing awards, such as cash, gift cards, t-shirts, water bottles, golf equipment, etc. to those who participate in wellness programs. The incentives can be used to reward a variety of behaviors, including completing an HRA, participating in a health screening, attending a health fair, quitting smoking, joining a fitness club, using a self-care guide, or accessing an e-health portal.

9) Use e-health as an adjunct. Many companies are putting up an e-health portal and calling it their wellness program. They rationalize that "everybody" uses the Internet and it is a low-cost way to reach all their employees. Unfortunately, this view has many flaws. Not only will the organization reach less than a quarter of its employees, but it may not save any money. An e-health portal should only be an adjunct to the more traditional wellness strategies, not a replacement for them.

10) Evaluate your program. In order to justify continuance of a wellness program, data must be gathered to satisfy upper level management. There are a variety of measures that can be obtained. They include the number of employees who participate, changes in specific risk factors among the employee population, changes in absenteeism rates, changes in productivity and/or presenteeism and employee satisfaction surveys. Perhaps the most important variable is financial data to determine if reductions in health care costs took place.

The cost of health care

Doctor visit: $121

ER visit: $586

Average brand-name prescription: $135

44% of a company's benefit costs are due to health care

The cost of poor health

A study conducted at Steelcase Corp. by the University of Michigan determined that for every Steelcase employee who had the following concerns, the company paid more per year in health care costs.